The Essar Group has entered into exclusive discussions to pick up majority stake in the African telecom assets of the Dhabi Group, an investment company led by members of the Abu Dhabi royal family.
Through its subsidiary named Warid Telecom, the Dhabi Group owns mobile networks in Pakistan, Bangladesh, Congo, Uganda and Cote d?Ivoire. The discussions with the Essar Group are for Congo and Uganda operations only.
A statement issued by the two groups on Sunday said the ?two companies had agreed to enter into exclusive discussions in relation to an investment by the Essar Group into the telecommunications portfolio of Dhabi Group?s African assets?. Standard Chartered Bank is acting as exclusive financial advisor to the Dhabi Group.
According to sources, Essar is likely to pick up controlling stake in the African telecom assets.
A preliminary agreement between the Dhabi Group and Essar was signed in Abu Dhabi, in a meeting between Essar?s Group CEO Prashant Ruia and Dhabi Group chairman Sheikh Nahayan Al-Nahayan.
The announcement comes just a fortnight after Essar bought majority stake in Econet Wireless Kenya, offering mobile services in that country under the ?yu? brand name.
The company already has around 4,00,000 subscribers on its network in Nairobi and Mombasa and expects the number to grow significantly as it completes it roll out across Kenya by end of the year.
Back home, Essar holds 33% stake in Vodafone-Essar, which is a joint venture with the Vodafone Group, and is the country?s second largest GSM operator with over 75 million subscribers.
The group owns Essar Telecom Infrastructure, one of the largest independent telecom tower infrastructure providers in India and operates an outsourcing services business under the Aegis brand, with over 33,000 employees globally across 32 delivery centres in the Philippines, Costa Rica, US, Africa and India.
Dhabi Group and its chairman, HH Sheikh Nahayan Mabarak Al Nahayan, lead a consortium of investors composed of private equity and family offices in the region. The Group has diversified business interests with a focus on emerging market opportunities in financial services, telecommunications and real estate.
Dhabi Group and its consortia have banking interests in Asia; its portfolio was expanded in 2005 to include telecommunications services in Asia and Africa. Other business interests include real estate development, hotels, oil-related services, and manufacturing/diversified industrials.
The Group aims to strengthen its reach and diversify its portfolio through a series of strategic partnerships that will help optimise its potential in the emerging markets.